Study says real milk production costs aren’t being met in France

By Jim Cornall contact

- Last updated on GMT

The EMB said a new study by BAL in Germany suggests farmers in France are not covering milk production costs.
The EMB said a new study by BAL in Germany suggests farmers in France are not covering milk production costs.

Related tags: France, Cost, Milk

The European Milk Board (EMB), responding to French President Emmanuel Macron’s announcement that the milk price will be determined by production costs, has released data from a study it commissioned to look at farmer’s costs to produce milk.

French dairy producer organizations APLI, OPL, and France Milk Board (FMB) Grand Ouest and FMB Bassin Normand, in collaboration with the EMB, commissioned the study​ (in French only) by the German Farm Economics and Rural Studies Office (BAL).

Boris Gondouin of the APLI (Association des Producteurs de Lait Independants/Association of Independent Milk Producers) said the results of the study are “unequivocal."

"We need at least 45.14 cents (per kg of milk) to cover milk production costs, remuneration included."

EMB president Romuald Schaber said the up-to-date, representative figures on production costs are key.

“They should serve as the basis for political discussions and to calculate the milk price,"​ Schaber said.

The EMB said with an average milk price of 33.91 cents per kilogram milk over the last five years, the shortfall in terms of production cost coverage has been 27%.

Finding solutions

Even in 2017, where there was some recovery of milk prices, producers were still short by 10.72 cents per kilogram to cover their production costs and to receive fair remuneration for their work, the EMB argued.

"Now that we have these figures, work can continue,"​ Denis Jehannin, vice-president of the producers' organization FMB Grand Ouest, said.

"We can refer to these figures during price negotiations with the industry​."

Joseph Martin, representative of OPL (Organisation des producteurs de lait), said it is now necessary to find concrete solutions.

"We call on political representatives to implement an adequate framework that would finally make viable producer prices a reality. Together with policy-makers and other sectoral representatives, we should find the appropriate solutions to ensure the future of the sector,”​ Martin said.

Related topics: Markets, Pricing Pressures, Fresh Milk

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